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Reforming the CAP

Agriculture could mean food, employment, idyllic landscapes, rural culture and preserving species and habitats. It could also mean soil and water pollution, deforestation, land conversion and monoculture landscapes. Weighing the pressures and the benefits from agriculture, how could Europe shape its future agricultural policy?

The pressures and benefits from agriculture pose an intervention dilemma. Extensification would benefit semi-natural habitats and reduce local pressures on soil, water and air but increase the area needed for agricultural production. Intensification would achieve the opposite. At the global level, an average yield increase would help to avoid further deforestation, but if the yield increases would be associated with further increasing pollution and disturbance of the nutrient cycle (by mineral nitrogen fertiliser inputs), the overall situation might still deteriorate. There is thus a trade-off between reducing environmental pressures at field level through extensification and maintenance of natural (uncultivated) areas at landscape level. This has direct implications for biodiversity (notably semi-natural and natural habitats), and indirectly for delivery of ecosystem services (including carbon capture and water retention).

The current CAP reform proposals up to 2020 address environmental challenges by coupling agricultural subsidies to stricter cross-compliance with environmental legislation and ‘greening measures’: compulsory crop diversification and maintenance of permanent grassland and ecological landscape elements. These measures would cover approximately 7 % of the farmland (‘ecological focus areas’) and would be financed under the first pillar (production-oriented). This general regime could be flanked by specific agri-environment measures under the second pillar (rural development).

Ex-ante studies indicate a mildly positive effect on the environment, and much will depend on the actual implementation of the measures. Annual European greenhouse gas emissions are estimated to go down by 2 %, but this figure does not take any compensatory mechanisms (increased imports) into account.

The crop rotation and permanent grassland measures are not expected to affect agricultural practice much, as many farmers already apply the prescribed crop rotation and much grassland is not suitable for ploughing up anyway. The grassland measure could even be counter-productive in the short term if farmers anticipate to the new regulations by ploughing up some existing grassland before 2014 (the baseline year for grassland maintenance). On top of that, the current implementation of cross-compliance and agri-environment schemes is criticised by the EU Court of Auditors, pointing out that goals and measures are weakly related and that the environmental benefits are unclear.

Long-term perspectives

A more ambitious and long-term approach would explicitly address resource efficiency of the agricultural sector in terms of productivity, land take, carbon capture, water use and dependence on mineral fertilisers and pesticides. This would imply an overarching logic regarding the desired intensity of agriculture, with regional differentiation where appropriate. ‘Green’ agriculture - relying on the use of on-farm resources rather than on external mineral inputs - is advocated by UNEP as a general development model, combining productivity increase with economic and environmental gains. This appears particularly relevant for developing countries, where the potential for further productivity gains in low-input systems is considerable. Transforming the major food production areas in the world into low-input systems, however, would be a major operation, affecting productivity and food prices and potentially impacting global food security. For example, only about 4% of European farmland is currently under organic production [1], and its average yield loss compared to conventional systems is estimated at around 20-25 %.

A long-term transition towards more sustainable agriculture systems, employing innovative production methods and emission reduction measures, seems nevertheless called for [2]. Precision farming and organic practices, combining crop rotation and non-chemical crop protection, could increase overall efficiency in terms of land take, water use and nutrient management. Still being aimed at optimising yields, such an approach would  improve the quality of soil, water and air with indirect benefits for biodiversity.

Further improvements in the ecological infrastructure of the farmed landscape would result from measures already included in the CAP reform proposals, such as small-scale set-aside, conservation headlands and hedgerow maintenance. Long-term benefits regarding, for example, pollination and biological disease control may also outweigh the immediate overall productivity loss of such measures.

Maintaining high nature value farming is a special challenge in this context. Due to socio-economic pressures, many of the remaining high nature value (HNV) farmland areas can be expected to lose their character in the near future, despite current levels of financial support. A more targeted intervention may prevent such decline, at least regionally. Areas combining geophysical constraints (preventing intensification) with a varied rural economy (providing alternative sources of income, e.g. from tourism, and options for part-time employment) appear to offer the best perspectives for HNV farmland conservation.

The consumption side of the equation should not be neglected. Dietary shifts, more effective distribution chains, and food waste prevention, for example, could potentially compensate for yield penalties associated with more sustainable production methods. Support to low-input (e.g. organic) farming would thus have to be flanked by measures to promote consumption changes and efficiency gains in the food chain.

Towards a new intervention logic

Suggestions for change:

  1. Increase the resource efficiency of European agriculture
    Food security is best protected by reducing the overall ecological impact of European agriculture. This implies a fundamental shift towards more ecological approaches and an increase of overall resource efficiency in terms of external chemical inputs, water and energy use, land take and waste generation. The CAP subsidies should provide incentives for such efficiency gains.
  2. Use the diversity of European agriculture
    The diversity of European agriculture provides different opportunities. There is scope for intensive and innovative production systems (particularly in peri-urban settings) as well as extensive systems with high associated natural and cultural values. Different situations require different tools and approaches. The CAP should therefore be firmly embedded in a broader rural development perspective.
  3. Pay farmers for ecosystem services
    The clarity and direction of the CAP can be improved by paying farmers for the delivery of ecosystem services, rather than providing unspecified direct payments and compensating them for costs incurred in mitigating environmental impacts.
  4. Support a shift in the consumption patterns.
    Big efficiency gains can be expected from dietary shifts (e.g. less meat consumption) and food waste reduction. The CAP should be embedded in a wider food system perspective, also addressing distribution and consumption. The food distributors and retailers play a key role here. Tax incentives and consumer campaigns can also be effective.

[1] EEA SEBI 020 indicator

[2] Jonathan A. Foley, Navin Ramankutty, Kate A. Brauman, Emily S. Cassidy, James S. Gerber, Matt Johnston, Nathaniel D. Mueller, Christine O’Connell, Deepak K. Ray, Paul C. West, Christian Balzer, Elena M. Bennett, Stephen R. Carpenter, Jason Hill, Chad Monfreda, Stephen Polasky, Johan Rockström, John Sheehan, Stefan Siebert, David Tilman & David P. M. Zaks, 2011. Solutions for a cultivated planet. Nature, Vol. 478, pp. 337-342.

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